STOCK MARKET BULLISH -- LONG -- CAUTION -- TURN MAY BE IMMINENT

Keybot the Quant is long but champing at the bit to flip back to the short side to begin the new week of trading. The algo wanted to see the SPX 2038-2039 level to confirm the downside but price bounced from here intraday Friday. If the SPX drops under 2038, it is likely that Keybot will flip to the bear side. If the SPX remains above 2038, Keybot will likely remain long. The SPX begins the new week of trading at 2045 so the bears need about -7 in the S&P futures to show they are making a run lower. The bulls need to push the SPX above 2064 to accelerate the upside, a formidable task, so instead bulls will focus on keeping SPX above 2038 while pushing financials and the NYA Index higher.

The bears retake the critical NYA 10790 level (40-week MA) to the downside so the stock market is in trouble in 2015 if the NYA remains below. If the NYA moves above 10790 stocks will rally again. Ditto XLF 24.26. XLF begins the week in the bear camp at 24.12 only 14 cents under. So bulls need the SPX to stay above 2038 and the NYA to move above 10790 and XLF above 24.26. The bears simply need weak overnight S&P futures and for the SPX to lose 2038 after the opening bell to prove that down is the direction ahead. If the SPX drops under 2038 the NYA and XLF will remain bearish and heading lower. If the stock market rallies but the NYA or XLF do not turn bullish above the levels listed, equities will reverse and sell off.

Keybot prints one pre-scheduled number this week on Friday morning. The bulls are driving the bus but the stock market is a coin-flip. Markets are erratic and unstable and can go either way. The SPX 2038, NYA 10790 and XLF 24.26 tells you who wins.

1/18/15; 7:00 PM EST =

1/16/15; 10:00 AM EST =

1/11/15; 7:00 PM EST = +19; signal line is +42 but algorithm remains long

1/9/15; 10:35 AM EST = +19; signal line is +43 but algorithm remains long